topic Moved to CA but still working remotely for PA Employer in State tax filing

Moved to CA but still working remotely for PA Employer

mak2110 — Thu, 17 Dec 2020 14:15:07 GMT

Hello,

We just recently moved to CA from PA, but I am still working remotely from CA for my PA Employer. What are the multiple state tax implications and will my employer withhold both CA and PA taxes from my paycheck? At the end of the year do I only need to file a CA tax return along with the Federal return? As we just moved recently, I believe I would have to file the PA return and a partial year CA return for this year only?

Thank you!

Re: Moved to CA but still working remotely for PA Employer

TomD8 — Thu, 17 Dec 2020 17:02:38 GMT

When you move from one state to another, for that tax year you file as a part-year resident in each of the two states. See this TT help reference on that topic: How do I file a part-year state return? (intuit.com)

All your income as a PA resident is taxable by PA; all your income after becoming a CA resident is taxable by CA. You become a CA resident for tax purposes when you begin living in your new home in CA. Note that your income after the move may continue to be taxable by PA as well as by CA. Here is PA's rule regarding their taxation of telecommuting income:

https://revenue-pa.custhelp.com/app/answers/detail/a_id/3597/related/1

If you do have to pay PA after the move, you'll be able to take a credit on your CA return for tax paid to PA on the income that is taxed by both states. Since your post-move income will be 100% taxable by CA in any scenario, and CA's tax rate is higher than PA's, I suggest you ask your employer to withhold CA taxes. If they are unable to do so, you should make quarterly estimated tax payments to CA after the move.

Re: Moved to CA but still working remotely for PA Employer

mak2110 — Thu, 17 Dec 2020 23:03:31 GMT

Thank you so much for your response! As a follow up, if in case my PA employer is unable to withhold CA taxes from my paycheck, how do I figure out the quarterly estimated tax payments that I would need to make to CA? Is there a specific form for this purpose and any guidelines behind it?

Thank you again!

Re: Moved to CA but still working remotely for PA Employer

TomD8 — Sun, 20 Dec 2020 15:20:14 GMT

This web reference has CA's estimated tax rules and instructions, as well as an estimated tax calculator:

https://www.ftb.ca.gov/pay/estimated-tax-payments.html